Practice Areas

Importers to Pay More Than $3 Million to Settle Duty Evasion Charges

Monday, February 16, 2015

Sandler, Travis & Rosenberg Trade Report

The Department of Justice announced Feb. 12 more than $3 million in penalties against three importers accused of evading antidumping and countervailing duties. This case illustrates the increasing use of the False Claims Act to pursue the fraudulent avoidance of tariffs and other import charges.

According to a DOJ press release, the three importers have agreed to pay penalties of $2.3 million, $650,000 and $100,000, respectively, to resolve a lawsuit alleging that they engaged in schemes to evade AD and CV duties on imports of aluminum extrusions from China. The U.S. alleged that these companies, which sell shower doors and shower enclosures made with the extrusions, misrepresented to U.S. Customs and Border Protection that the country of origin of the imported goods was Malaysia when in fact they were transshipped through Malaysia from China. The government’s complaint also alleged that the companies purchased China-made aluminum extrusions imported by other domestic companies and caused or conspired with those importers to make false declarations to CBP to evade duties.

The DOJ notes that the allegations resolved by these settlements were originally brought by a whistleblower under the qui tam provisions of the FCA. This law permits private parties to sue on behalf of the government those who falsely claim federal funds or avoid paying funds owed to the government and to recover a share of any settlement. In this case, the whistleblower will receive $555,100.